Replies to post #27700 on Advanced Micro Devices Inc (AMD)

[dougSF30]

Semi, technically yes, if you want to risk that much capital, and you have it available, etc. As a practical matter, with options that are not struck at very low prices, the exercise-and-sell transaction, which requires no capital, is virtually universal.

Doug

[rlweitz]

I was wondering where all that Put activity was coming from over the last couple of weeks. It didn't seem to make much sense when everything appears to be going fairly well. I guess this explains it.

At the risk of sounding like a short:

1st Rule of Trading AMD: When Jerry buys, BUY!!! When Jerry sells, SELL!!! Don't think about it, just do it.

I'm still long AMD, but nobody ever went broke following the rule above. Particularly Jerry.

Remember, May 2001. Jerry insisted flash sales were strong, then dumps his shares a week later. Within 3 weeks the flash slump news "bomb" was dropped and many of us were left holding the bag.

Could there be a possible yield/90 nm transition issue?

I hate to admit it, but where there's smoke there's usually fire.

Looking to lighten up a bit.

[HailMary]

Help me understand. Why did he have to sell?

He didn't have to sell, but if he didn't he would have had to cough up a cool $2.7 million to pay for the shares from the exercise.

The only reason for exercising options for a $2/share gain would be that they are expiring. He could have exercised and sold at $18 not too long ago. He probably thought it would be higher by expiration, but it didn't work out that way.